According to the 2016 Global Outsourcing Survey, which spoke to 280 representatives from organisations around the globe, the amount of businesses who follow an outsourcing model is continuing to grow and expand across different functions (e.g. IT, human resources and finance).
Outsourcing requires a systematic approach to ensure the process works to the company’s advantage. Although these operations may vary in each scenario - depending on company size, the services required and the timescale of the project - a systematic approach is important for the outsourcing model to succeed.
Benefits of outsourcing include:
● Swiftness and expertise
● Increased efficiency
● Reduced costs
● More time to focus on the core of the project
Read on and learn how to make your outsourcing model work for you.
Define the scope and schedule of your project
The first step in any procurement process should be clearly defining the scope and timescale for the project.
Establish a clear statement of what you want to accomplish and when the project should be completed by. You should also be specific about the outcome you want from each supplier.
Gaining this understanding of the project so early on will give you an idea of which areas you will need to outsource, as well as an understanding of what you will be looking for from the supplier (which will help you later on down the line when choosing your suppliers). This will also help to better establish exactly what you’re looking for in proposals and quotes from vendors.
Know When to Outsource
Knowing when to outsource is an important step in the procurement process. Being able to delegate work to the correct companies as and when necessary can greatly impact the success of a project. If your company is experiencing high demand and/or you don’t specialise in a particular area within the project and want to get the best results possible - outsourcing is an effective solution.
A good way to determine where you need to outsource, and how to follow this through effectively, is to follow the procurement cycle. The first stages of this process will identify where outsourcing might be needed and the options available in the market to fulfil your requirements. Together these 13 stages within the cycle will also help determine the factors that must be considered when finding a supplier, how to develop a suitable contract and review job performance.
For more information on when you should outsource, please visit our blog post on how to know when to outsource
Work without risk
Compliance demands are rapidly increasing, along with the risks associated with failing to meet these requirements. Many organisations, specifically financial and pharmaceutical, must comply with large and growing government regulations, reporting requirements and regional rules that increase their overall operational costs.
Risks of noncompliance with regulatory requirements include legal sanctions, consent decrees, prosecution, liability suits, failed business strategies, and damage to reputation and brand. In extreme cases, non-compliance can threaten the existence of the organisation.
Compliance outsourcing companies specialise in working within and adhering to regulatory requirements. The right compliance outsourcing provider will offer the following benefits:
● Gains in efficiency and quality
● Access to subject matter specialists
● Seamless execution from compliance assessment through to the corrective action
● Easy access to relevant sources
● Data analytics and reporting tools that provide predictive trends and insights
While your company will remain responsible for compliance and any risks, outsourcing can provide an effective mix of internal and external resources to meticulously meet compliance demands.
Evaluate service providers with care and caution
Upon choosing your service providers, a lot of considerations must be made. Look at this process like you would when hiring a new full-time employee - what do you really need out of them, and how can you work together? It’s also important to ask any necessary questions up front. It is also worth asking for references and feedback from their other clients.
Do as much research as you can into these vendors and don’t choose entirely based on price. Investing in a higher quality of service may benefit you greatly in the long run.
Communication is key
Maintaining clear communication with your chosen partners throughout the whole contract is key. Whether the supplier is in another city or another country, establishing clear lines of communication at the beginning of a project. All parties should have a clear idea of where the project is and what is expected of them in that stage of development.
Remember that it will be harder to get your point across via email, phone call, video call and other media. Therefore, sufficient preparation for face to face meetings is important to ensure that both parties have a clear understanding of objectives and goals. As well as this it’s important to make your communication expectations clear throughout the entire duration of a project.
Tying payment into project milestones is a great way to stay up to date with the vendors’ work, as well as check quality and stay on track for the final deadline. This contact will also contribute to building and maintaining a great working relationship.
Discuss what support will be given after the service has been performed
Establishing a support clause should be looked into at the beginning of every procurement. The best providers will be on hand to help whenever needed, particularly when it comes to outsourcing IT.
Negotiating a support clause before the supplier begins work is much easier than after the completion of the project, as this may confuse the contract originally agreed. IT procurement can often benefit from this most, due technology often requiring ongoing maintenance and updating. However, creative and business services can also greatly benefit from post project support.
If a project needs altering post completion, being able to call upon the service provider to make these adjustments will be far easier than trying to re-hire them or finding someone new entirely. Therefore, specifying what free support is to be given and negotiating discounted prices for future modifications could be detrimental to the success of the project on a long-term basis.
We hope you are able to use these insights to assist you in your own outsourcing. Don’t forget to follow us on LinkedIn for more updates.